CREATIVE COMMUNITY

Whether it be an art project, a videogame, a music album, a novel light design or clever outdoor gear – the crowdfunding platform Kickstarter lets you introduce unique ideas and realise them through financial support from friends, fans or inspired strangers. Ideas span from homemade postcards to Oscar award-winning documentaries.

Some projects stem from well-known influential artists such as De La Soul or Marina Abramović. But the majority of projects are initiated by creative people who no one has heard of before. They have all dreamt of a product or an idea and offer their sponsors the opportunity to be a part of making this dream come true. Over 10 million people from every continent have already supported a project on Kickstarter, helping to realise tens of thousands of creative projects of varying sizes. In total, over 3.4 billion dollars have been pledged, making the company the pioneering and most successful provider of this method of financing.
But raising money through Kickstarter isn’t as easy as some startups might believe. Crowdfunding campaigns require precise planning and a lot of dedication. Christoph Nagel, International Manager at Kickstarter, explains the company’s success, and how Kickstarter helps creative minds to successfully realise their crowdfunding ventures.

Today, Kickstarter is one of the leaders in non-conventional investment ventures – but started as a venture itself. Please tell us about the beginning.Our founder Perry Chen had the idea for Kickstarter when he was living in New Orleans. He wanted to bring the Austrian DJs Kruder & Dorfmeister to play at a music festival, but he didn’t want to take on the financial risk. He thought, “What if people could go to a site and pledge for tickets to a show? If enough money was pledged, they would be charged and the show would happen. If not, it wouldn’t.” Eventually, Perry moved to New York, met Yancey Strickler, and shared his idea. They got to work and brought on Charles Adler as the third cofounder. Kickstarter launched in April 2009.

Kickstarter helps to raise funds for creative projects. How do you define “creative”?The original idea was that Kickstarter would be used for artistic projects like films, dance performances, and music albums. But people quickly discovered that it was useful for other kinds of creative work. One of the earliest projects to fund a physical product was the Glif, a stand for iPhone photography. Games are also a huge category on Kickstarter. So, we’ve always defined “creative” quite broadly. Basically, you need to be making something that you can share with your backers when it’s done. In exchange for their support, backers typically get a copy of the finished work.

Are there additional categories, guidelines or rules that need to be followed to place a project on Kickstarter?We have a quite simple list of rules and a list of things that are prohibited on Kickstarter, mostly things that might be unsafe or illegal. There are some special rules for projects in our Design and Technology categories. We ask those creators to show a working prototype, and to be clear about what stage of development the project is in.

Which projects, categories or sectors are the next trend, in your opinion?Tabletop games are booming on Kickstarter – we’ve really become a hub of the tabletop community, and an important way that people bring their game ideas to life. A French tabletop project recently entered the top ten of our all-time most-funded projects list, raising 7 million dollars. Our games team just got back from Spiel in Essen where they hosted events for our vast tabletop community. We’re also seeing a lot of innovation in musical instruments, along the lines of the Artiphon and the Field Kits from KOMA in Berlin. We’re also excited about innovation in tools for makers, like the Goliath CNC, an “autonomous robotic machine tool.”

Kickstarter does not claim ownership over the projects or the ideas. Why is there no participation in companies as a business model?It’s important to note that Kickstarter is not an investment platform. The backers don’t end up having any claim over the creator’s work, and neither does Kickstarter.

Why doesn’t Kickstarter allow backers to get a financial return from a project they supported?Because there are so many great creative ideas that will never make any money, particularly in the arts. When ideas are judged on their merit, rather than the promise of profit, they can escape conventional measures of success, and you can see big, bold ideas come to life, leading to a more diverse and vibrant culture. People back projects on Kickstarter out of love, not because they think an idea will turn into a profitable business.

Which countries does Kickstarter operate in?We’re open to creators in 22 countries: the US, UK, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden, Germany, France, Spain, Italy, Austria, Belgium, Switzerland, Luxembourg, Hong Kong, Singapore, Mexico, and Japan, where we opened in September. Of course, anyone in the world can back a Kickstarter project.

German investors are considered risk-averse compared to other countries. Is it harder in Germany to get money out of people’s pockets?At Kickstarter, we speak about backers rather than investors. It’s all about helping people bring cool creative projects to life, in exchange for rewards. And it doesn’t seem like Germans are less likely to do so. In fact, since Kickstarter launched, around 336,000 German backers have supported projects from all over the world. That’s more than France (248,000 backers) and puts Germany in the second position in the EU, right after the UK. With nearly 4,000 launched projects since 2012 and nearly 35 million euros pledged, we can see that innovation is part of the German culture – and it looks like they want to keep seeing innovative ideas become a reality.

In which European countries is investment more pronounced?The United Kingdom is our most mature market when it comes to the number of individual backers. To me, this can be explained by the fact that we’ve been open for creators since 2012 there, as opposed to 2015 for the rest of Europe. When creators launch their projects, they use their own community as the initial base of support. Another element could be cultural reasons. The UK loves to look over to the US to see what they’re up to, making the UK a first go-to place for US companies that want to grow overseas.

Do you think that Europe in general needs improvement or, let’s say, “motivation” when it comes to non-conventional investment ventures?You know what they say: Good things take time. More seriously, I believe there is a natural learning curve for countries to adapt and embrace innovation. Funding creative projects through the crowd is a concept that was born in the US, mostly because there was a need. The cultural and creative sector in the US faces constant cutbacks, whereas Germany’s public arts funding, for example, allows the country to have 23 times more full-time symphony orchestras per capita than the United States. That being said, cutbacks are also spreading in Europe, and creative people are increasingly looking for ways to stay independent and make a living.

Please tell us about the success rate of Kickstarter. I guess there’s always some default risk for projects?It depends on what you mean by success rate. About 36 percent of Kickstarter projects reach their funding goals, which in our all-or-nothing system means that the creator can receive those funds and move forward with the project. What happens after that? Well, we helped a professor at the University of Pennsylvania conduct a survey of backers. His independent study found that about 9 percent of projects failed to deliver, while 65 percent of backers agreed or strongly agreed with the statement that “the reward was delivered on time.” We think 9 percent is a reasonable failure rate – you might compare it to, say, tech start-ups or new restaurants. We also understand that not everyone wants to take that risk. So, we aim to make it very clear exactly how Kickstarter works – that it’s not a store, and that there are no guarantees.

What do you think are the main factors for a project to be placed on Kickstarter successfully?Our Creator Handbook has a wealth of tips on how to be successful on Kickstarter. Here are some important ones: Be sure that you know how you’ll get the word out about your project before you launch it. For example, build up a mailing list of people interested. We also recommend that you put a lot of yourself into the project. For example, make sure you appear in the video! Kickstarter backers aren’t just supporting ideas, they’re supporting creators, and they want to know what inspired you to take on this project. If you’re building a physical product, work out a manufacturing plan before you launch on Kickstarter. Our new Hardware Studio initiative can help with that.

What is your vision for Kickstarter?Most companies exist to generate profit for shareholders. But in 2015 we became a Public Benefit Corporation, a special kind of company that has only recently become possible in many US states. We rewrote our corporate charter to legally bind us to a different set of commitments. Broadly speaking, we have to evaluate the impact of our decisions on society, not just on our profits. Our founders have said they’ll never sell the company or go public. We want to stay independent forever, and we think this aligns us with our independent creators. So, our vision is to serve more creators, in more places, in more ways. And to never forget our commitment to creativity.

Christoph Nagel has been crafting sustainable communities for as long as he can remember — first by launching his own sneaker company, “Jojo Project”, at the age of 23, then by helping to grow the recommendation website Yelp in Europe. Today, Christoph is fully devoted to helping creative people around Europe bring their ideas and projects to life as International Manager Europe for Kickstarter.